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Candlewood Suites Galveston – Image Credit HVS
HVS Brokerage & Advisory is exclusively advising on the sale of Candlewood Suites Galveston. This 83-key, extended-stay hotel has recently undergone renovations. Positioned in Galveston, Texas, a historically strong leisure market, the property is now listed at a reduced price of $6,900,000, or $83,100 per key. Interested parties are encouraged to contact James Rebullida for more details.
Financial Performance and Projections
The hotel boasts a strong cash flow with a net operating income (NOI) of $773,000 and a capitalization rate of 11.2%. The financial performance reflects a gross operating profit of 58.4% as of the end of 2024. Projections suggest that stabilized rooms revenue could surpass $2,000,000, with an anticipated NOI of $810,000. Despite its underperformance in occupancy and revenue per available room (RevPAR) compared to competitors, growth is expected.
Strategic Market and Location
Galveston is a key drive-to leisure market within the Texas Triangle, attracting approximately 21 million people within a four-hour drive. The area is known for its numerous festivals and events, particularly in the spring and summer, enhancing the demand for local accommodations. The hotel’s location near major demand generators like the University of Texas Medical Branch and various corporate entities adds to its appeal.
Local Economic and Developmental Highlights
Galveston is experiencing significant development, including the construction of the $700-million Margaritaville Resort and expansions at the Port of Galveston. These projects are expected to boost the local economy and increase tourist and business traffic to the area. The economic impact of visitors to Galveston Island was notably strong in 2024, with tourism expenditures reaching $1.3 billion.
Investment Potential
The sale of Candlewood Suites Galveston represents an opportunity to acquire a property below replacement cost, with significant upside potential in a growing market. The new owner will benefit from a 10-year license agreement with InterContinental Hotels Group and access to the IHG® Rewards Club. This asset is particularly attractive due to its extended-stay model, which typically offers higher profit margins and lower operational costs.
Inquire at HVS.
